mgmt 449 ch 1 8 test banks crafting and executing strategy 22e thompson
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Crafting and Executing Strategy, 22e (Thompson)
Chapter 1
What Is Strategy and Why Is It Important?
1) Managerial considerations in determining how to compete successfully do not normally include
A) How can a company attract, keep, and please customers?
B) How can a company modify its entire product line to emphasize its internal service attributes?
C) How should a company respond to changing economic and market conditions?
D) How should a company be competitive against rivals?
E) How should a company position itself in the marketplace?
Answer: B
Explanation: Managerial considerations for successful strategies serve consumers better while increasing
performance. Internal attributes are modified to meet product line changes based on changes in the market
rather than vice versa.
Difficulty: 1 Easy
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 What we mean by a company's strategy and why it needs to differ from
competitors' strategies.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
, 2
2) A pharmaceutical company selling prescription drugs in France for the past 10 years has had moderate sales
in a crowded market, as its rivals manufacture and market drugs of similar efficacy and having similar safety
precautions, but that have superior market share. This particular pharmaceutical company's greatest challenge is
to increase French doctors' prescribing their drugs. What would be the most effective strategy to improve sales
performance in the existing market?
A) modifying marketing communication to increase brand familiarity within key physician segments
B) relocating all the existing drug manufacturing facilities to developing countries to reduce operational costs
C) employing hiring plans that aim at acquiring drug designers from rival companies
D) exiting the market and entering a new unexplored geographical location
E) engaging in new contract talks with suppliers about price breaks
Answer: A
Explanation: Modifying marketing communication to target the most preferred set of physicians would help
increase the prescription of drugs, boosting sales and performance, and increasing market share. Relocation or
reduced supplier costs might improve profits but would not affect sales performance. Employing drug designers
does not add value as the rivals, too, offer drugs with similar efficacy and safety precautions.
Difficulty: 3 Hard
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 What we mean by a company's strategy and why it needs to differ from
competitors' strategies.
Bloom's: Apply
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
3) A company's strategy consists of the action plan management takes to
A) stake out a unique market position and achieve superior profitability.
B) compete against rivals and establish a transitory competitive advantage.
C) concentrate on improving the existing product offering irrespective of the changing and turbulent markets.
D) develop a more appealing business model than rivals.
E) identify its strategic vision, its strategic objectives, and its strategic intent.
Answer: A
Explanation: A company's strategy is the set of actions that its managers take to outperform the company's
competitors with a unique market position and sustained competitive advantage.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 What we mean by a company's strategy and why it needs to differ from
competitors' strategies.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
4) is the set of actions that its managers take to outperform the company's competitors and achieve
superior profitability.
A) A strategy
B) A mission statement
C) Strategic intent
D) A cost-price framework
E) A market vision
, 3
Answer: A
Explanation: A company's strategy is the set of actions that its managers take to outperform the company's
competitors and achieve superior profitability. Achieving this entails making a managerial commitment to a
coherent array of well-considered moves about how to compete.
, 4
Difficulty: 1 Easy
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 What we mean by a company's strategy and why it needs to differ from
competitors' strategies.
Bloom's: Remember
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
5) Strategy, at its essence, is about
A) matching rival businesses' products and quality dimensions in the marketplace.
B) building profits for short-term success.
C) realigning the market to provoke change in rival companies.
D) developing lasting success that can support growth and secure the company's future over the long term.
E) re-creating a business model with regularity.
Answer: D
Explanation: Strategy at its essence is about setting a company apart from its rivals and staking out a market
position that is not crowded with strong competitors. It aims at doing what rivals cannot or do not do.
Difficulty: 2 Medium
Topic: Strategy and the Strategic Management Process
Learning Objective: 01-01 What we mean by a company's strategy and why it needs to differ from
competitors' strategies.
Bloom's: Understand
AACSB: Analytical Thinking
Accessibility: Keyboard Navigation
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